Stocks on Bursa Malaysia ended lower yesterday due to lack of risk interest among investors amidst speculation that the general election will be held early next year. In the absence of fresh catalyst from the local front, market performance regionally was perturbed over the blurry progress on the US fiscal cliff. However, buying support was partly supported by better-than-expected China’s manufacturing data which signalled positive growth for Asia’s biggest economy. The FBM KLCI fell 3.48 points or 0.22% to 1,607.35 after opening at 1,608.31, and the market barometer moved within a tight range of between 1,606.38 and 1,610.46 throughout the day. Losers outpaced gainers by 394 to 278 while 316 counters were unchanged. Turnover fell to 728.743 million shares worth RM1.275 billion from Friday’s 1.18 billion shares worth RM2.21 billion.
The FBM KLCI opened 2.52 points lower with a down gap at 1,608.31 and moved sideways between the range of 1,610.46 and 1,606.38. It was trading in the negative territory throughout the day. Chart-wise, the FBM KLCI formed a small black spinning-top candlestick which indicates consolidation with a bearish bias, and the key index is likely to continue to consolidate today within a range of 1,606 to 1,613. A break of the lower support will likely see it sliding lower to re-test the psychological support of 1,600-point, while a break of the immediate overhead resistance will see it moving higher to the next target level of 1,620.
MACD continued to climb marginally higher but is still below the signal-line, while its histogram further contracted upward, indicating a further reduction in the bearish momentum. RSI (14) hooked downward to 31.2 from 33.1, reflecting the pullback in the key index, and the relative strength is still in the bearish zone. Stochastic was higher at 34.3, indicating a continued improvement of the market strength and the short term up cycle. Readings from the indicators showed that the FBM KLCI is in a consolidation mode slow digesting the bearish momentum.
The overall trend of the FBM KLCI remained down. However, for the immediate short term, it has turned sideways as it is trading above the 5-day SMA but below the 10-day SMA, and it is also staying just below the long term 200-day SMA which is currently at 1,609. Hence, a break of the 10-day SMA which is currently at 1,612 will likely see the key index rallying towards the next higher target level of 1,620 while a break of the 5-day SMA support at 1,606 will see it falling back to re-test the 1600-point psychological support level.
Overnight, the Dow fell 59.98 points or -0.46% to close at 12,965.60. Today, the FBM KLCI is likely to trade within a range of 1,601 to 1,615.
This week's expected range: 1570 – 1641
Today’s expected range: 1601 – 1615
Resistance: 1610, 1612, 1615
Support: 1601, 1603, 1605
Stocks to watch: OLDTOWN, TAMBUN, LATITUD